Midterms meltdown

Tired of all the winning, President Trump has now pivoted to losing. And losing bigly, might we add.

So to help make sense of it all, we're taking inspiration from a fellow Queens native who also famously, um, lost quite a bit: Seinfeld's own George Costanza.

1. "Was that wrong? Should I not have done that?"

The opposition Dems are now on track to win as many as 255 House seats, potentially forming their largest majority in decades!

Why?

It turns out folks don't like it when you pledge to end wars, but instead start and lose new ones; or vow to drain the swamp, but instead execute a $1.4B crypto rug-pull; or scoff at insider-trading, then make Nancy look like a passive ETF with your 60 trades a day; or campaign against inflation, then deliver $6.50 diesel.

But what's it all mean?

Sure, the Dems now take every House committee chair and control the floor. Or to put it another way, they now control the megaphone, purse strings, and spotlight, auguring a lame-duck period of subpoenas and hearings on anything from Epstein and insider-trading to who turned off Ukraine's Starlink, and why.

And yet to be clear, for all the soundbites and Fox fury, the House can't stop a war, unwind tariffs, or force a president to (say) stop humiliating allies or coddling foes.

So then what about...

2. "George is getting upset!"

Everyone saw that flipped House coming, but a flipped Senate was always more of a stretch. And yet we've now seen...

• Texas elect its first Dem (Talarico) since 1988

• Mississippi (almost?) elect its first since 1982, and

• Kansas elect its first since 1932!

Throw in other big flips like South Carolina (taking the late Lindsey Graham's seat), North Carolina (its first Dem since 2008), and Maine (ousting 30-year veteran Susan Collins), and the Democrats now control the Senate.

But what's it all mean?

This new ~55 seat majority will slam the brakes on any Trump 2.0 judicial confirmations and cabinet appointments, perhaps meaning fewer Guilfoyles to Greece or Petes to the Pentagon, but also (say) fewer tax-cut extensions when parts of the One Big Beautiful Bill start sunsetting from late 2028.

And yet, again, a Democratic Senate can't (with this majority) impeach a president, force him to start using his sanctions authority against a foreign dictator, nor (say) uphold security commitments to allies.

So then what about...

3. "Serenity now!"

If losing Congress hurt, the gubernatorial map offered little safe harbour:

• Texas just elected its first Dem governor (Gina Hinojosa) since 1990, and

• Both Georgia and Iowa just got their first Dems since 1998.

Throw in others (like Ohio, Wisconsin) and the Democrats now control a majority of US states for the first time in 16 years. Of the ten most populous states, President Trump's party now runs just one (Florida)!

Why so many flips? Sure, these statehouse victories often reflect more local issues and personalities, but this feels more like federal spill-over: Georgia’s outgoing governor was actually pretty popular, for example.

As for what it all means? The White House will now see more domestic roadblocks against its agenda, but nowhere does that grab our attention more than in Texas, where the state's rapid-fire AI data-centre buildout just collided headfirst with public pushback. And that might explain...

4. "Millions of dollars! Down the drain!"

Anyone hoping for a Red Wave soon got one on their trading screens: as the results came in, Nasdaq 100 futures dropped 2%, S&P500 futures lost 1% (though then rebounded after Trump accepted the results), and Japan's Nikkei fell ~4%.

It's not because markets are MAGA, but because all that unexpected losing forced them to rapidly reprice big bets, including around tech, and particularly in Texas.

In fact, prediction markets were giving Governor Abbott 70% odds of re-election, particularly after he reversed course by pausing new AI data centres in rural communities — this helped tame voter anger around grid reliability, water scarcity, and related taxes.

But with Texas due to host a quarter of all new US data centre capacity coming online by 2030, there was always a quiet if widespread market hope he would unwind that moratorium after re-election.

Instead, his loss now not only suggests the moratorium could be permanent, but those market jitters reflect fears the broader US era of frictionless tech-sector expansion could now be over. Realistically it’ll find a new equilibrium with greater community buy-in, but it might still tap the US brakes in the short-term right as DC races to establish AI dominance against a less restrained competitor in China.

Anyway, President Trump just suffered what Costanza might describe as electoral "shrinkage". But rather than protest this time, he's congratulated his opposition, and is pledging to work across the aisle.